Thursday, May 19, 2011

Diamond deal signed

A new joint venture holding company now owns Namdeb and De Beers Marine Namibia, as well as diamond mining licences for both land and sea mining areas.

The Namibian Government and De Beers equally own the holding company, through a new agreement signed yesterday that would reform the country’s diamond operations.In addition, the Government also increased its holding in De Beers Marine Namibia, through Namdeb, with De Beers selling 20 percent of its stake.

De Beers owned 70 percent of De Beers Marine Namibia, while Namdeb owned 30 percent.Namdeb now owns 50 percent of De Beers Marine Namibia, increasing Government’s direct ownership to 25 percent, since Namdeb is a 50/50 joint venture company between Government and De Beers.

Overall, the agreement gives Government direct and equal ownership to diamonds mined in the country, which in the past belonged to Namdeb.The Namibia Diamond Trading Company would continue to sort, value and market the diamonds.

The agreement is backdated to 2006, a process that raked in N$260 million for the state in accrued benefits.The Minister of Mines and Energy Isak Katali said the agreement brings the country’s diamond sector to new heights, equal to that of Brandberg Mountain which, at 2 606 metres, is Namibia’s highest mountain.

“Our agreement, and the partnership between Government and De Beers has created a solution that will benefit the people of Namibia now and in the long-term,” said Katali.

The mines minister said it is important for Government to work with De Beers in creating an equal shareholding of aligned partners in De Beers Marine Namibia because the country has an exciting future in offshore diamond mining.Bruce Cleaver represented the De Beers group, as the acting chief executive officer.

The agreement necessitated various changes in other agreements between the two parties, one of which is an implementation agreement that guides the working of the holding company.

With this, the country got what it has always advocated for, direct and equal ownership in diamonds, especially marine diamonds of which production is expected to continue outstripping land-mined diamonds.

The agreement is a se­cond significant victory for Namibia following the successful arguments and setting up beneficiation and value addition of Namibian diamonds inside the country.

Diamonds mined on land have declined significantly with more carats being mined at sea, while last year’s marine diamond production outstripped land-mined diamonds by nearly 30 percent.